The outbreak of COVID19 has turned the upside down, making several people unemployed and businesses with zero demand for their products and services. Yet, some companies are managing to ride out the recession. During this challenging time, when everything is obscure about the future, it can be hard to stay afloat. If you are running a company, a significant expense burning through cash will likely be payroll.

When the economy is choppy, it is hard to come by loans. Therefore, if you are running out of cash, you will be facing difficulty paying salaries to your employees. When the economy shatters, companies let their employees go because of the inability to pay wages to them. Perhaps you would have thought of laying off your employees when the business was hit by a sudden outbreak of an invisible threat. Just because other companies are laying off employees, it does not mean that you will also make them redundant.

Present circumstances can call for laying off employees, but it will have an impact on your business in the long run. It is crucial to figure out how much money you will be spending on hiring after the economy bounced back. A good rule of thumb says that you should find the middle ground when either of the options is not much favorable. You cannot afford to pay salaries to your employees, nor can you make them redundant. So, what should you do? Here are the alternatives.

Cut their Payroll sensibly

As you cannot afford to pay salaries to all employees, you can plan to cut their pays. However, make sure that you are not inconsiderate while doing so. Regardless of the salary, you should set a fixed percentage, for instance, 10% to reduce their pays.

This slightly cut will give a boost to business. Of course, most of the employees will get offended and object. Tell them what your business is going through and how long they will have to be on a pay cut, but at the same time, you need to bear in mind that you are giving them enough money to get by.

However, some entrenched employees will not believe the fact that you are in a tight spot and will likely step down. Since you cannot keep them from doing so, let them go.

Switch up people’s duties

As an employer, your goal should be making the most of your money. During the economic recession, you will not have enough business. When there is no enough work to go around, you should try to switch up people’s duties. For instance, some factory workers may be asked to maintenance work like painting, fixing tools, and the like when the economy is facing a downturn.

Likewise, you can save your cost by asking your current employees to perform jobs that you would otherwise hire someone else to do. Switching up roles will put some of your employees on edge, but you can abate their discomfort if you tell them this situation is temporary.

Look for alternatives

To be able to keep up with payroll, you need to cut back on your operation cost. To keep the total cost of your business as low as possible, you should ask your employees for better ideas.

It is not surprising that they have a better approach or idea to trim the business operation cost. They may have identified a room for improvement that has slipped through the cracks. Encourage your employees to share their creative ideas. Tell them it will benefit them too.

Furlough

Furloughing is a tough decision. It is a process of sending employees on leaves for a temporary period, which can be either short or long. Before you furlough your employees, make sure that you have calculated what or who your company is going to need. Will you be able to manage to survive without their support?

However, you need to ensure that the employee you are furloughing can manage to get by without a paycheque. It is better if you tell your employees beforehand about how long they need to be on unpaid leaves.

Transparency can help you and your employees to reach the right decision. Do not forget that furloughing may harm your business. If you furlough your employees, they will likely get a job in a different company, causing you to spend money on hiring in the future. Before you decide to furlough your employees, make sure that you have calculated all pros and cons.

You can cut payroll without laying off your employees, but the other alternatives also may not seem very favorable. As you know that you will have to find out the middle ground when both the options are not suitable, the ways mentioned above can help you stay afloat. However, if you are still struggling to arrange money to pay your employees, you should take out loans for bad credit with no guarantor.